Inside the 2027 Medicare Drug Price Cuts Across Cancer, Diabetes, and Chronic Disease Therapies
The Centers for Medicare & Medicaid Services (CMS) has released the negotiated 2027 drug prices for 15 high-expenditure medicines, marking one of the program’s most consequential cost-containment milestones to date. The list covers therapies used across cancer, diabetes, COPD, asthma, fibrotic lung disease, psychiatric disorders, gastroenterology, and rare neurological conditions. Together, these medicines accounted for $42.5 billion in Medicare Part D gross covered prescription drug costs in 2024, around 15% of total program spending .
According to CMS, the new Maximum Fair Prices (MFPs) will take effect January 1, 2027, and will immediately lower costs for millions of seniors. The administration highlighted that if these prices had been in place in 2024, Medicare would have saved $12 billion in net drug spending, a 44% reduction across the 15 therapies .
What You Need To Know
- CMS finalized 2027 negotiated prices (MFPs) for 15 high-expenditure drugs, reflecting discounts of up to 85%.
- If applied in 2024, the prices would have cut Medicare spending by $12B (44% net reduction).
- Over 5.3M Medicare beneficiaries used these drugs in 2024, across cancer, diabetes, COPD, IPF, psychiatric disorders, and GI diseases.
- MFPs become effective January 1, 2027, with $685M in expected out-of-pocket savings for Part D beneficiaries.
A negotiation cycle defined by deeper discounts
CMS describes a negotiation period that involved data submissions, evidence review, and three rounds of meetings between drugmakers and agency teams. CMS issued initial offers by June 1, 2025, received counteroffers by July 1, and concluded all agreements by November 1, 2025. In several cases, companies’ revised counteroffers were accepted; in others, CMS’ final written offers were approved without further negotiation .
These therapies collectively supported conditions affecting over 5.3 million Medicare Part D beneficiaries in 2024, including type 2 diabetes, COPD, prostate cancer, hematologic malignancies, idiopathic pulmonary fibrosis, bipolar disorder, and IBS . Source: CMS
Savings extend across premiums, out-of-pocket costs, and system-wide expenditure
CMS estimates that when the prices take effect in 2027, Medicare enrolees will save $685 million in out-of-pocket spending under the standard benefit design. Lower negotiated prices also reduce plan liabilities, which could stabilize premiums over time.
In the agency’s new fact sheet, CMS emphasizes that the negotiation program is built to balance affordability with long-term innovation incentives. Evaluation criteria included manufacturer-reported R&D costs, recoupment, federal financial support, unit production costs, market data, exclusivity timelines, and therapeutic alternatives. CMS also incorporated patient and clinician insights through focused roundtables and a public town hall, elements designed to increase transparency and clinical relevance in the negotiation cycle .
The 15 drugs reflect a broad mix of therapeutic and market-dominant classes
The negotiated list includes some of Medicare’s highest-spend therapies, such as Ozempic and Wegovy, which together accounted for $15.1 billion in 2024 spending. Oncology agents such as Xtandi, Ibrance, Pomalyst, and Calquence represent high-cost, high-incidence cancer burdens within Medicare’s aging population. Pulmonary therapies like Trelegy Ellipta, Breo Ellipta, and Ofev also feature prominently, reflecting the prevalence of COPD and fibrotic lung disorders.
Neuropsychiatric and GI drugs, including Vraylar, Linzess, Xifaxan, and Austedo round out the list, showing CMS’ focus not only on blockbuster cardiometabolic drugs but also on chronic conditions driving recurrent costs.
The accompanying CMS press statement positioned these savings as evidence of an accelerated policy direction. The release highlighted the administration’s “aggressive push for lower prices” and contrasted this year’s outcomes with prior negotiation cycles, noting deeper cuts and stronger taxpayer savings .
This cycle also expands the total number of negotiated drugs: when combined with the first 10 drugs taking effect in 2026, Medicare will have 25 MFP-priced drugs active by 2027.
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CMS confirmed that negotiated prices will escalate annually at the rate of CPI-U and will remain in effect as long as a drug stays in the negotiation program. Future negotiation cycles may also reference these MFPs as benchmark inputs for establishing initial offers in subsequent rounds, especially when selected drugs share therapeutic classes or close substitutes .
The agency will publish a detailed, public explanation of the 2027 MFP calculations by March 2026.
With the second cycle complete, CMS appears poised for deeper structural reforms as the 2028 negotiation cycle begins.
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